“THIS IS A REPOST FROM A POST I MADE AT WICKEDFIRE” But I think it’s important so I’m going to republish it here.
For those you who don’t know I bought a network to be annouced later. But this has allowed me to see things from both sides of the coin. I think a lot of affiliates don’t understand how all this stuff works. And I’d like to share with yo some stuff I’ve learned with regards to shaving and scrubbing from owning a network being and affiliate the last 4 years.
First off yes there are shady advertisers and networks that get greedy and shave and scrub just to be greedy! As you would with any business partner make sure you know who you’re dealing with.
With that said there’s also a TON of good advertisers and networks out there as well. And I’d like to share with you some of the ways they look at things from their perspectives.
From the Networks perspective:
What’s the only two things network sales reps have to sell you to bring you on board? We all know the typical AM mantra….. We have a better payouts…. and unique offers.
Have you heard that before?
I’m sure you have if you have traffic and have been around long. So lets examine the better payouts as this is what comes into play here.
Alright so 90-95% of affiliate managers have never run campaigns themselves. That’s industry knowledge. So most of them are salesmen, they come into interview and get the job because they have a good personality. This is fine but they don’t know the business that well from an affiliates perspective. So their managers arm them with “Affiliates are looking for unique offers and better payouts.” And off they go to start working with us as affiliates.
Now I’m not saying all networks do this by any means but I have seen it on some ( and I’m not going to mention them so don’t ask ) now that I’m on the other side. Honestly when it comes to payouts on a network it’s all about how well their side can negotiate and how good of a deal they can get. People often talk about volume, I don’t agree with that. I find most advertisers would rather have a smaller amount of very quality traffic that converts well on the backside for them rather then a large amount that sucks. Just like we’re buying traffic from sources like adwords and ysm they’re buying traffic from you. So if the network has strong publishers they get strong payouts, bottom-line.
However there’s a lot of advertisers that offer the same payout to everyone. Networks have employees and overhead and need to make a certain % on the traffic coming through in order to make a profit and cover costs. But they also have to compete in the “higher payouts” space. So this puts them between a rock and a hard place. So what’s their other options. Shaving leads. Basically making is so your pixel won’t fire sometimes going through the network. I hear this is a “feature” in Directtrack. I run a directtrack system and have yet to find it personally, but that’s not to say it isn’t there. Now lets take an example of how this plays out in real life.
AM: hey what are you running?
You: I’m running ringtones.
AM: What’s your payout?
AM: I can get you 14$ on that
Now I’m not going to preach EPC like I always do but it’s the ONLY NUMBER THAT MATTERS!
Now lets say the advertiser is only paying 14$ a lead on this how does this new network make money and still allow them to “up your payout”? Yep you guessed it they shave.
On your old network you send through 100 clicks and 15 convert to make you 13 * 15 = $195/100 clicks = 1.95$ EPC.
On your new network you send thorugh 100 clicks and 15 convert but 1 or 2 aren’t shown in your system. Which means they converted with the advertiser but you’re not getting credit. The affiliate company gets the money and we don’t get paid on it.
$14 * 13 lead = $196/100 clicks = $1.96 EPC
Effectively nothing changed for you but everyone is still making the same money and the new network got you business. So you can see the motivation for them to do this.
Now from the Advertisers Perspective:
Email submits are a classic example here so that’s what I’m going to use. But really this applies to anyone promoting free submit or lead type offers.
Stop and imagine you’re an advertiser for a second. I know we as affiliates don’t do this to often but lets do it for a second here so you can understand why things happen.
Now most advertisers know affiliates only really look at one thing, at least newer affiliates well and even some verterans for that matter. And that’s payout.
As an advertiser they’re really buying traffic/leads just like we are with PPC. They have a conversion ratio they look at as well.
Back to email submits, lets say they pay you $1.00/submit. Then you send a email submit then they send them through a co-regestration path and on average lets say make 2$ for each visitor that fills out an email submit. Every advertiser is different of course. Now lets say the traffic your sending only makes them 1$ for example so they’re breaking even with it. In that situation they have a three choices.
1. They could call the affiliate company and say this persons traffic isn’t converting for us please cut him off of this offer ( I get these calls some times )
2. They could not fire your pixel sometimes to bring their conversions into line
with your traffic. Now this is the most transparent to us as affiliates. It sucks, no question. But how do we expect the advertiser to take traffic that doesn’t make money for them.
3. Tell the affiliate manager to cut your payout and for traffic from these pubs we’ll only pay X rather then Y. This is the one I prefer mostly.
Often times when I get cut off to an offer I go back in a re-negotiate for a lower payout if you can believe that. Because it still makes good money even at the lower payout and then everyone is happy. At least that’s straight forward and not shady.
But honestly I think most advertisers just scrub/shave on the backside because it’s transparent and they think they’re not rocking the boat as much.
So when we as affiliates hear higher payouts always question it. EPC is ALLLLLLLLLL that matters. Everything else can be fudged with.
I really think there’s a lot of secrecy on both sides of the game and the more open, honest and relationship you build with your network the better. I run all my traffic sources by AM’s I work with. But I have a lot of trust in them that they’re not going to hand it out to other people. If a traffic source is questionable I ask if they’ll take the traffic. Most of the time the networks I work with say yes lets try it and see how it does. That way when you run into issues both sides know what’s going on.
Hope this sheds some light what’s going on behind the scenes as I think it’s a huge unknown. I’ll try and cover more on these relationships and how things work as I go through my learning process.